Mary Meeker, who I interviewed here and who will speak at Web 2.0, also came out with a positive report on the company. From her report:

Initiating coverage on Google with Overweight-V rating – Google has helped change the direction of the Internet and has built impressive market share and an especially strong business model. We believe Google should continue to help pace the growth in the still early-stage online search market and benefit from related revenue growth. Google shares could have upside as implied by a variety of valuation methodologies, most notably our DCF, discussed beginning on page 56.

Her report is, as usual, very comprehensive, and I’m still reading through it. But I have to say, it reads well, in the meta view – she mentions that Google is well positioned to be the front end to audio and video content (as I’ve said before, TiVo + Google = VOI), and ends her opening section with this very Web 2.0 passage:

Particularly, with the launch of Gmail, we became intrigued at the possibility that Google could create a distributed computing model layered over user-generated content. Right now users can have 1GB of webmail storage—but with potentially tens of thousands of servers, and commensurately cheap storage space, we wonder about the possibility of Google providing a thin application “desktop” that resides on the browser, where users could jot brief notes (GWord?), do basic calculations (GExcel?), and of course, search. The April 2004 registration of gbrowser.com by Google could lend some credibility to this line of thinking. Ultimately, we believe the company could have a significant opportunity ahead of it in Search / Find / Obtain well beyond the Google.com domain.